Sponsored by George Fox University
Home Archives May 2006 Charitable giving: Uncovering hidden benefits

Charitable giving: Uncovering hidden benefits

| Print |  Email
Monday, May 01, 2006

by Greg Chaillé, president, Oregon Community Foundation

Whether your business has an established plan for charitable giving or is just getting started, it is important to know how much of the philanthropic contributions your business makes can be deducted for tax purposes.

It can be daunting to navigate the complex tax structure for charitable giving. For instance, because the IRS treats business expenses differently from charitable contributions, it is essential that you are precise about the deductions you claim.

The following information applicable to Oregon businesses is based on contributions made to 501(c)(3) corporations and does not cover all types of charitable giving.

Business Structure Who Receives Deduction Allowable Deduction
C corporation Corporation Up to 10% of a business’s pre-tax profit in the year of the donations. Contributions over 10% can be carried over for five years.
S corporation Individual owner(s) Up to 50% an of individual’s adjusted gross income in the year of the donations. There is usually a five-year carryover.
Partnership Individual owners Up to 50% of an individual’s adjusted gross income in the year of the donations. There is usually a five-year carryover.
Sole proprietorship Individual owner Up to 50% of an individual’s adjusted gross income in the year of the donations. There is usually a five-year carryover.


The next chart summarizes IRS regulations for deductions. For greater detail on the regulations that are specifically applicable to Oregon and your organization or business, you must consult your tax adviser.

Type of contribution Charitable deductions Business expenses
Direct cash donation Yes. However, if you receive any benefit in return, you must subtract the value of that benefit from the amount of your deduction. No.
Cash given to employees to donate to charities of their choice Yes. No.
Sponsorship Yes, if not directly related to business. Yes, if directly related to business.
Purchase of ad in nonprofit publication Yes, if you don’t expect to earn at least the cost of the ad as a result of its publication. Yes, if you expect to earn at least the cost of the ad as a result of its publication.
In-kind gifts of products Yes, for the value of your costs, not market value. However, inventory donations by C corporations to benefit the ill, the needy or infants, and gifts of scientific equipment used for research may be eligible for higher-value deductions. No. Be sure not to deduct your costs as both a business expense and a charitable contribution.
Depreciable property Yes. Fair market value less prior depreciation. No.
Stock Yes, of both C and S corporations. Deductions can be made for fair market value if held by the donor for more than one year. No.


— Greg Chaillé, president, Oregon Community Foundation, www.ocfl.org.
The Oregon Community Foundation offers advice on the tax benefits of setting up a business or family foundation and provides guidance for charitable giving.
 

More Articles

Oversight? Or gaming the system?

News
Monday, July 14, 2014
AmazonBY VIVIAN MCINERNY | OB BLOGGER

Some people think Amazon’s winking eye logo is starting to look like a hoodwink.


Read more...

Understanding Oregon medical marijuana dispensary tenants

News
Friday, June 13, 2014
061314 thumb grassrentBY CLIFF HOCKLEY | OB GUEST BLOGGER

This article summarizes the key considerations a building owner must keep in mind when thinking about leasing to a medical marijuana dispensary.


Read more...

Risks & rewards of owning triple net investments

Contributed Blogs
Thursday, July 24, 2014
NNNinvestmentBY CLIFF HOCKLEY | OB GUEST CONTRIBUTOR

With the increasing retirements of Baby Boomers, a massive real estate shift has created a significant increase in demand for NNN properties. The result? Increased demand has triggered higher prices and lower yields.


Read more...

The role of higher education as K-12 underperforms

Contributed Blogs
Friday, May 30, 2014
ThumbChalkboardBY DEBRA RINGOLD | OB GUEST CONTRIBUTOR

Since 1970 the performance of our public education system has steadily deteriorated.


Read more...

Attack of the Robin Sages

Contributed Blogs
Monday, July 07, 2014
070714 thumb linkedinfakesBY TOM COX | OB BLOGGER

Named after the 2010 experiment by Thomas Ryan, "Robin Sages" are fake social media profiles designed to encourage linking and divulging valuable information.


Read more...

Who said we should sell in May?

Contributed Blogs
Friday, July 18, 2014
BullMarketBY JASON NORRIS | OB GUEST CONTRIBUTOR

Back in May, we shared a common Wall Street quote about investing, “Sell in May and go away.” Fast forward to July and the most common question we have been getting from clients is, “When is the market pullback going to occur?”


Read more...

EPA Standards: A breath of fresh air for the region

News
Thursday, June 12, 2014
EPABY ANDREA DURBIN | OB GUEST BLOGGER

Last week, the Obama administration took an important and welcomed step in the effort to protect the health and well-being of all Oregonians by limiting carbon pollution from existing power plants.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS